While the top index shares paused for breath and in fact, moved down a bit, the share market rally triggered by the surprise establishment of a UPA government broadened on Wednesday, with middlecap and small-cap shares joining the bull game.
The Bombay Stock Exchanges mid cap and small cap indices gained 6 per cent and 8.9 per cent respectively while the benchmark Sensex fell by 1.7 per cent to close the day at 14,060.
As the market players turned optimistic on economic growth and market performance post-elections they started investing into the attractively priced blue chips.
This is the natural way the market reacts in an upswing as the investments first move into the large companies of a sector and then into the smaller ones. “The investors now find value into
the second tier of companies in the respective sectors,” said Amitabh Chakraborty, president (equities), of Religare Enterprises.
After the results, the Sensex moved up by 17.3 per cent on Monday while the mid cap and the small cap indices moved up by 11.8 per cent and 9 per cent respectively.
While real estate major DLF (a sensex company) lost 7.7 per cent on Wednesday after gaining 25 per cent and 19 per cent on Monday and Tuesday respectively, it was the day for the smaller players on Wednesday. Hindustan Construction, Omaxe and Parsvnath — all midcap realty companies — were up by 24, 20 and 19 per cent respectively.